Sunshine Coast council says federal budget may fuel rate rise

By Bruce Atkinson
Thu 15 May 2014, 10:24 AM AEST

The Sunshine Coast council says it is facing funding cuts and cost increases from the federal budget.

The Local Government Association of Queensland says the state's councils are likely to forego more than $182 million in extra funding as the Commonwealth freezes Financial Assistance Grants over the next four years.

Deputy Mayor and finance portfolio holder Chris Thompson says the grant money is used for community programs and library funding but it is too early to know if they will be cut back or scrapped.

Councillor Thompson says the increase to the fuel excise will also hurt council.

"Council uses approximately 2.8 million litres of fuel every year, 1.4 million litres in diesel and 1.4 million litres in unleaded petrol, so when you consume that amount of fuel any rise does have a significant impact," he said.

He says the impact of the budget may force an increase in rates.

"There are a number of areas which we were concerned about and the fuel excise is probably the main one where you have potential for fuel to increase significantly and we use a lot of fuel and any price rise in fuel does affect us," he said.

"We'll absorb as much of the impact as we can but at the end of the day we may have to pass some on in terms of a rates rise to the residents."

'Very difficult'

Gympie Mayor Ron Dyne it is yet another hit on council funding.

"I think it has a big impact on all councils because really the State Government has also reduced all of their funding grants and it's making it more difficult for councils to make those budget ends meet," he said.

He says it will force councils to rethink their own budgets.

"Not to increase the councils contributions makes it very difficult for, particularly those smaller western councils, rural councils, to make ends meet because people have also shrunk their road maintenance budgets and those sort of things," he said.

"So all of those things have impacts and it's just another game of cost sharing back into local government."